BNY Mellon Ultra Short Income ETF

BNY Mellon Ultra Short Income ETF (BKUI) is an actively managed bond fund. It holds short-term, investment-grade debt and cash equivalents, and at least 25% of its assets are in bank obligations. Its 0.12% expense ratio is below the 0.18% average of similar ultra-short funds, though iShares' ICSH and Vanguard's VUSB cost less. It aims for monthly income with very small price swings, but it is not a money market fund.

• Over the year to Oct 27, 2026, BKUI returned +3.5%, 3rd of 8 among similar funds.
• Its 5-year annualized return was +3.7%.
• Its worst full calendar year was 2022 (-0.1%); its best was 2023 (+5.8%).
• The deepest fall in its price history was 1.7% (Aug 31, 2021 to Jun 14, 2022), recovered by Jan 18, 2023.

As of Jun 30, 2026, the fund held 125 securities; the ten largest made up 12.64% of assets, and 48.46% sat in cash and money-market holdings.

The bonds mature in 1.6 years on average (weighted by size), with an average coupon of 3.5%.

• Over the three months to Jun 30, 2026, investors added a net $24.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.33%, +0.36%, +0.19%.

BKUI does not track an index. Its sub-adviser, Dreyfus, a division of Mellon Investments Corporation, picks the holdings. The fund normally puts at least 80% of its net assets in investment-grade, US-dollar debt or cash equivalents. These can be fixed, variable or floating rate. They include corporate bonds, asset-backed securities, repurchase agreements (short-term loans backed by collateral), commercial paper, certificates of deposit, US Treasuries, and debt from foreign governments and companies. At least 25% goes to bank obligations, so the fund is concentrated in the banking industry.

The manager normally keeps effective duration, a measure of how much prices react to interest rates, at one year or less. It may run longer when rates are volatile. The portfolio's average credit rating must be at least A, and each purchase must be rated at least BBB- or sit in the top two short-term tiers. The manager pairs a top-down economic view with bond-by-bond valuation work, and shifts duration based on where it expects rates to go. Portfolio turnover was 13.55%.

As of June 30, 2026, the fund held 157 positions, and the top 10 made up 12.64% of assets. The largest were a Norddeutsche Landesbank note (2.5%), Old Line Funding commercial paper (2.1%) and a Treasury note due January 2028 (1.7%). About 48% was classified as cash and cash-like holdings. Bonds and notes made up 50.7%, with an average maturity of 1.6 years. The share price is not fixed at $1.

• BKUI charges 0.12% a year, versus an average of 0.18% for the similar funds below (3rd of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $12 in the first year and $154 over 10 years (assuming a 5% annual return).

It holds short-term, high-quality debt and has rarely lost more than a percent or two, so it can work as a low-volatility reserve.

BKUI launched in August 2021, so it has no record from the 2008 financial crisis or the 2020 COVID crash. In the 2022 bear market, it fell 1.4% between January 3 and June 14, 2022, and got back to its old high in about seven months. Its deepest drop ever was 1.7%. Its worst calendar year was 2022, with a loss of 0.11%. For someone who may need to sell shares in a bad year, those small losses are the main appeal. The trailing 12-month yield was 4.01% as of October 27, 2026, paid monthly. Costs are low: $12 in the first year on $10,000 in the SEC's standard example. Drawbacks: income falls when short-term rates fall, the fund isn't FDIC-insured, its bank concentration adds credit risk, and long-term growth is modest. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).